Statista projects e-commerce revenues will increase to $4.88 trillion in 2021, which means if you’re a small to medium-size business, the time may be right to expand your product footprint across borders. But for many companies new to international shipping, there are multiple factors to consider, and ensuring a seamless customer delivery experience while maintaining profitability can be challenging.
Here are three strategies for streamlining cross-border e-commerce fulfillment while actually increasing profits per parcel.
1. Know how your product is regulated internationally.
Here’s a fun fact: it’s illegal to import calendars for commercial purposes into Vietnam. That’s right, folks, we said “calendars.” This means online retailers based in the U.S. may not send quantities of more than 100 calendars to customers in Vietnam. Break the law and prepare to do time (pun intended!).
And this is just one example of hundreds of country-specific regulations complicating international shipping. Talk about overwhelming! But to simplify the complexity, UPS has an online tool that enables shippers to access a list of regulations. Input the origin and destination countries, and UPS returns information about shipping requirements.
Also, understand the duties and taxes. For example, when a U.S. retailer ships a pair of sneakers from Los Angeles to a customer, store, or warehouse in Chicago, there is a single shipping rate. But if this retailer sends the same pair of shoes to a customer, store, or warehouse in Amsterdam, the shipment is subjected to a whole new set of duties and taxes. The total cost of shipping an order internationally is referred to as the “landed cost,” and it is critical to understand this cost on the front end of the shipping process. Specifically, you want to know:
- Is the product taxable? At what quantity? At what value?
- What customs regulations apply?
- What is the country’s minimum threshold value for duties?
Keep in mind, duties and tariffs continuously change, and therefore this will be an ongoing exercise.
2. Decrease shipping costs with a cloud Transportation Management System (TMS) for parcel shipping.
Shipping parcels individually across borders, especially if they have a low price point, isn’t cost-effective. Smart shippers are instead using break bulk services, wherein multiple orders are consolidated into one big shipment to cross the border in order to reduce shipping charges and paperwork. Once on the other side, the consolidated shipment is broken down into separate shipments for individual delivery.
A cloud TMS for parcel shipping ensures your labeling and documentation can support this, and Logistyx has seen customers achieve savings of more than 25% on their transportation costs by switching to a break bulk service rather than sending shipments individually. For large shippers sending multiple items, the economics of break bulk are clear. Not only is there a cost saving on the actual shipping charge, due to lower cost/weight rates on higher weight shipments, but there is a corresponding reduction in the quantity and cost of paperwork. If 50 individual shipments are consolidated into one break bulk shipment, there is only one set of paperwork to clear customs, meaning less chance of delays at the border. With carriers charging for each invoice declared at the border, the savings opportunities are clear, and having only one carrier invoice to be checked, also means less work for the finance department.
3. Use a cloud TMS for parcel shipping to rate shop.
Rating and rate shopping isn’t straightforward across the border. In Europe, for example, carriers use myriad rate calculation methods. Unlike the United States, there isn’t a uniform postal code system across Europe, which means rate-zone definitions differ by country, carrier, and service. Some rate zones are even a combination of country postal codes, regions, cities, etc. Furthermore, there are no European-wide tariff structures. Rating is done on a per-carrier basis according to zones, weight, volume, and distance, but also accounting for factors such as pack quantity and load meters. These variables, in conjunction with different currencies, further complicate rating and rate shopping. A cloud TMS for parcel shipping enables you to rate shop across your entire transportation network to identify the optimal carrier service for each shipment based on all of these variables.
Manage Cross-Border Shipping with a Cloud TMS for Parcel Shipping
In summary, shippers moving parcels across borders should consider using a cloud TMS for parcel shipping to ensure they can simplify the complexity of regulations, label and documentation requirements, rating, and rate shopping.
To learn more about how Logistyx TME can provide the necessary flexibility to successfully execute cross-border parcel shipping, contact an expert today